November 15th, 2016 | Andrew Hagger | News

Consumers could be paying thousands of pounds more in interest payments on personal loans and credit card balances because they are failing to check and take steps to improve their credit scores, according to research carried out by credit improvement service Credit Improver. Lenders use credit scores to determine who qualifies for a loan or credit card, and at what interest rate and credit limit.

Credit Improver looked at the typical interest rate a borrower could secure – depending on their credit score – on a £5,000 personal loan paid back over 36 months. It also looked at the typical rate a borrower might secure on a credit card, and how much interest they would pay if that card had a £3,000 balance, and they committed to paying 4% of the outstanding balance every month.

Taking a £5,000 personal loan paid back over 36 months, and comparing a borrower with an ‘Excellent’ credit score, between 961 – 999*, and someone with a ‘Very Poor’ credit score, between 0 – 560*. The former could secure a typical rate of 3.8% APR, with monthly interest payments of £8.14 and total interest paid over the duration of the loan of £293.08. However, someone with a ‘Very Poor’ score, may typically secure an APR of 79.4%, with monthly interest payments an eye-watering £162.96 a month, and total interest paid of £5,866.60 over three years. That’s a staggering £5,573.52 more interest.

Even a borrower with a ‘Fair’ credit score, between 721 – 880, could still pay more than £1,000 extra in total interest over the duration of the loan, as the typical rate on a personal loan would be 16.9%. Also, by improving your credit score from ‘Very Poor’ to a ‘Poor’ rating, you could secure a better loan rate of 29% rather than almost 80%, and reduce the total interest paid by more than £3,500.

November 15th, 2016 | Andrew Hagger | News

Andrew Hagger of Moneycomms.co.uk today warned borrowers that overdraft costs could wipe out the discounts that shoppers receive during Black Friday promotions.

He Said: “The hype around ‘Black Friday’ and buying furniture and carpets in time for Christmas seems to increase every year, but before you get carried away with your debit card and max out your overdraft it’s worth weighing up the potential costs against cheaper alternative options.

Whether you’re going to blow a few hundred pounds or a four figure sum by repeatedly clicking the ‘add to basket’ button over the next few weeks, take a minute to understand what it’s going to cost in terms of interest and fees.

Some overdraft tariffs can be very reasonable – with First Direct charging just £1.96 if you’re in the red by £400 for a full 30 days – on the other hand a £2,000 overdrawn balance with a Halifax Current Account for 60 days will set you back an eye watering £180 – so what are the alternatives?

The credit card ‘Money Transfer’ or MT is often overlooked, but as you’ll see from the tables below can deliver huge cost savings when compared with an overdraft.

You have the same flexibility as an overdraft as the funds are transferred from your card into your bank account so you can shop for Xmas however you wish – that includes withdrawing cash at the ATM without having to pay the usual hefty credit card transaction fees.

The two most cost effective Money Transfer deals at the moment come from Virgin Money and MBNA offering 0% on the amount you borrow for 32 and 24 months respectively.

I’m not saying you should look to spread the cost of Christmas over such a prolonged period, however the only fee you’ll pay on these deals is a one off Money Transfer Fee which is 1.69% of the sum borrowed with Virgin Money and 1.99% with MBNA – both outperforming the high street bank overdrafts as you’ll see in the tables below.

Compared with a £1500 overdraft for 2 months an MT could easily save you more than £70 and for £3000 over 3 months the difference could be in excess of £210.

If it’s a credit card with a 0% deal you’d prefer, maybe for section 75 protection, look for maximum reward on minimum spend such as the new intu credit card which gives you a £20 gift voucher for just £250 spend – the equivalent of an 8% return.”

ENDS

November 8th, 2016 | Andrew Hagger | News

Every year millions of consumers make New Year’s resolutions and for a good number of those people it means consolidating their credit card and overdraft debts on to a zero per cent balance transfer deal.

Personal Finance expert, Andrew Hagger said: ” if you’ve got a solid balance that you’ve been carrying over from month to month, it makes financial sense to sort it out now rather than wait for 2017 to arrive and trigger you into action.”

“By getting ahead of the game and switching now you’ll save yourself two full months’ worth of interest and for someone with a £7,500 card balance at a market average of 18.9% APR that’s a saving of £236.25.”

So while we’re all looking of ways to keep the cost of Christmas down, there’s an obvious saving opportunity staring many people in the face every time they open their monthly credit card statement.

According to the latest statistics from The British bankers Association there is £26.8 billion pounds worth of credit card balances upon which interest is being charged – at 18.9% APR average this works out at £13.8 million in interest every day so there’s plenty of people who could save a good bit of money by switching  – as long as they have a decent credit record.

Individual cost savings depend on the current balance and interest rate being charged, however the following table gives you an idea of the amount of money you could save by acting early.

Credit card lenders are falling over themselves for your custom at the moment, so why not get your New Year’s resolution in ahead of the game and give your finances an early boost as a result.

November 8th, 2016 | Andrew Hagger | News

According to new YouGov research commissioned by Equifax, the credit information expert, 29% of Brits who celebrate Christmas say they feel pressured to spend more than they can afford for the festive season. On average, people expect to spend £441.24 on Christmas this year, with around 1 in 5 (21%) thinking they will spend more than they did last year.  The research also revealed that 7% of those who used a credit card to pay for Christmas 2015 still haven’t paid off the debt.

It appears, from the Equifax commissioned research, that women feel the pressure of festive spending more than men.  Nearly a third (32%) think they will feel pressured into spending more than they can afford compared to 26% of men. And when it comes to blowing the budget, 42% of women expect to spend £500 or more, but only 32% of men say the same.

Scottish consumers appear to be the biggest spenders, on average at £479.14; those living in the South seem to be more prudent averaging £403.16.

And those living in the East of England and Wales feel the most pressure to spend more than they can afford, with 33% of people in these regions admitting to this, compared to just 22% in the South.

In Scotland, 29% think they will spend more this year than they did last year, a significant increase on the overall average of 21%.

“It’s clear that many of us feel the pressure to spend for Christmas – which can leave us with hefty bills to pay come the New Year”, commented Lisa Hardstaff, Equifax credit information expert.  “But with over a quarter of people using credit cards towards paying for Christmas last year, we’re reminding consumers to plan ahead to ensure they can pay it off as quickly as possible. This particularly applies to the 11% who expect to spend more than £1,000 or more this year. It is vital that if they plan to use credit that they make repayments on time and if possible not just pay the minimum each month, otherwise they could end up like the 7% who are still paying off their Christmas spending from last year.”

Christmas on credit

Over a quarter (26%) used a credit card towards paying for Christmas last year, with a third of those aged 45 to 54 taking this option, compared to just 10% of 18 to 24 year-olds.

For those who chose to use credit, over half (54%) paid off the bill within 1 month.  However, 15% took 2 months or more.  Worryingly 5% took more than 6 months to pay off the Christmas spending on their credit card and 7% admitted to still not having paid off the bill fully by October of this year.

November 8th, 2016 | Andrew Hagger | News

Tempting finance deals such as Personal Contract Purchase offers (PCP) are luring car buyers to upgrade their cars more frequently, potentially creating an embarrassing cash shortfall, What Car? can reveal.

In a recent survey of motorists, 37% of respondents said they now changed their car more frequently than they did a decade ago, while more than one in five (22%) said that a generous finance offer would be the primary motivator in the decision to change.

However, with earnings on savings at an all-time low, and four in 10 adults having less than £500 in savings in the bank, motorists could be overstretching themselves when the initial, low PCP payment term ends.

What Car?’s survey indicates that these pitfalls are unlikely to be at the forefront of the car buyer’s mind when they make the purchase – a third of motorists agreed that modern car finance solutions such as PCP make upgrading easier.

The haste of buyers to switch to the latest model using car finance rather than cash coincides with a £48bn*** increase in national unsecured debt in just three years.

What Car? Editor Steve Huntingford commented: “The range of finance options available to car buyers is now more generous than ever and can often be an effective way to spread the cost of paying for a safer, better-equipped car.

“However, these finance options shouldn’t be seen as ‘free money’ and buyers need to ensure they have a financial cushion to cover the costs at the end of their initial payment term in order to stay on the road.

“The final payment to secure a vehicle on a PCP term is typically several thousand pounds, and the deposit on the next car can also require a substantial cash injection.

“Damage and excess mileage charges on a PCP-financed vehicle could also be an unpleasant surprise if not accounted for, so it is important to read the small print before making the commitment.”

November 1st, 2016 | Andrew Hagger | News

The UK’s youngest and oldest adults are least likely to switch financial providers, including credit cards, loans and mortgages. New research from Experian shows that two thirds (63%) of British adults  ‘rarely’ or ‘never’ change credit card provider, in spite of it being easier than ever to switch financial products.  The research also sheds new light on how people prefer to bank and their attitude to loans and mortgages.

James Jones from Experian said, “Millions of people are throwing away money and paying way over the odds on their borrowing. Most are already managing their accounts online and might not understand that it can take literally minutes to get a much better deal in just a matter of a few clicks. People with a strong credit history can qualify for highly competitive rates on credit cards, loans and mortgages. Now that the Experian Credit Score is available free, for everyone, forever, there really is no excuse not to shop around.”

Credit Cards

While 82% of people say they manage their credit cards online, 63% of Britons rarely or never change credit card provider. It appears that the groups who generally have the lowest levels of income in the country tend to be the least likely to switch to get better deals that could save them significant sums. A massive 75% of 18 to 24-year-olds and 77% of over-65s say they rarely or never change credit card provider.

“It’s young adults  who could benefit most by building good habits early and reviewing their financial accounts regularly, and switching when better deals become available. This could save them huge amounts in the long run. Using services like our new free CreditMatcher tool is a really easy way to see which credit card is suited to their needs and individual financial circumstances. Right now, 75% of young people are missing out on the best deals when it comes to credit cards.”

James’ Tips: Think about your priorities and why you want a new card when shopping around.

• Rewards cards can be a good option for people who travel regularly or spend a significant amount on their weekly shop
• 0% balance transfer cards allow you to transfer existing debt to a card where you pay no interest for a set period of time
• Many providers offer 0% introductory offers on purchases, which can be helpful if you’re planning to spread the cost of a big purchase over a number of months
• If you occasionally carry over your balance to the next month, then a competitive standard APR might be worth investigating

October 28th, 2016 | Andrew Hagger | News

To coincide with Good Money Week 2016 starting on Sunday 30th October, a new report from Castlefield Advisory Partners claims that Tracker funds are financing activities that are damaging people and the planet, pumping hundreds of millions of pounds into tobacco and fossil fuel companies.

John Ditchfield, Partner at Castlefield, said: “Trackers might appear to be a cheap investment solution, but we are concerned that people may not be fully aware that they are financing damaging social and environmental activities and putting investors’ money at risk.”

“Automated robo-investors are pumping hundreds of millions in pension savings and other investments into businesses which individuals would not choose to support and may actively want to avoid, for example tobacco and heavily polluting fossil fuel companies.

“More than 70 countries have ratified the Paris Climate Agreement and it is about to come into force, but a large chunk of tracker capital is invested in coal, oil and gas, exposing investors to serious risk.”

A new Good Money Week survey from Triodos Bank, released alongside the Castlefield report highlights how worried consumers are about these findings.

• 60% believe people should avoid investments that negatively affect people, society and the environment;
• 47% would move their money if they found their investments conflicted with their values.
• Nearly half (47%) have no idea which companies and industries their money is supporting.
• Investors want transparency – 48%, think that it should be standard for banks and other financial advisors to make customers fully aware where their money is invested.

For more information on ethical money issues, please take a look at Good Money Week and  Castlefield Advisory Partners.

ENDS

October 28th, 2016 | Andrew Hagger | News

As the clocks go back this weekend and the winter nights draw in, millions of homes could be left vulnerable to opportunistic thieves while their owners are working 9-5, as burglars take advantage of the extra hour of darkness to prey on empty homes.

According to a survey of over 3,000 people by home insurer Policy Expert, the average time to get home from work is 5.08pm. At present, that means people are arriving home in daylight hours.  However as of Sunday 30^th October it will get dark at 4.36pm, meaning that from Monday homes could now be empty and unattended in darkness for 33 minutes. The length of time for which homes could be left empty in darkness will increase by a one to two minutes every day until mid-December when the average home could be left unattended in darkness for a full hour and 17 minutes.

The most popular time that people return home from work is 5.30pm, which would mean people could be leaving their homes in darkness for 54 mins on Monday 31^st and potentially an hour and 39 minutes in mid-December.

Despite this, the research revealed that many homes do not have adequate security measures in place to protect their homes while they’re empty. Only 2 in 5 (40%) of those surveyed have timed lights and just a third (35%) have a burglar alarm fitted, while 5% admitted they had no security in place at all.

Adam Powell, Head of Operations at Policy Expert commented: “The winter months are a tempting time for opportunistic burglars, so it’s unsurprising we see thefts rise over this time. Longer nights and shorter days mean that there are more opportunities for crime to take place under the cover of darkness, so it’s important to remain vigilant and ensure your home is adequately protected. Any way to make your home look occupied or any visible deterrents, such as lights on timers, CCTV and burglar alarms should go some way in preventing a break in. Finally, check your home insurance policy to ensure it’s up to date and any valuables are declared – that way you shouldn’t return home to any nasty surprises.”

Tips on protecting your home:

• Install a timer to set lights inside your home to come on once it gets dark – choose a light in a visible room at the front of the house, not the hallway, as this will create the impression that someone is inside
• Invest in sensor-activated, external lighting for the garden and around the front of the home
• Install a burglar alarm – not only is this a visible deterrent, if someone does attempt to break in the alarm would alert neighbours and the police before any damage could be done
• Don’t leave curtains closed – during the day this makes it look like there’s no-one at home
• Make sure any outbuildings or sheds are locked and that any tools are hidden away – these could be used to break into your home
• Ensure any valuables are out of sight – remove the temptation and make sure these items cannot be seen from outside the house through the windows
• Never leave a spare key anywhere near the front door, for example under a doormat, flower pot – thieves know all the usual hiding places
• Similarly, don’t store house/car keys just inside your front door, as burglars could try to fish for the keys through the letterbox

October 25th, 2016 | Andrew Hagger | News

The over 50s are intrepid travellers but it appears many will take some home comforts away with them if they’re heading abroad this winter, according to Saga Travel Insurance.

A poll of almost 8,000 over 50s shows that one in three can’t go without a cup of tea as they take tea bags on holiday with them. In fact, one in five say they pack travel appliances, such as a travel kettle, so they can make a cup of tea while they’re away.

More than a quarter of over 50s also fill their suitcases with their favourite treats, such as cereal and chocolate. Some of these people also say they take a jar of marmite (3%) on holiday with them so they can enjoy a taste of home while they’re away.

However, it’s not just food and drink that over 50s pack in their suitcase. Around 6% of people travel with photos of their family, 2% take a picture of their pet with them and some over 50s even take their own pillow with them.

It seems that while focusing on packing home comforts, the over 50s overlook some holiday essentials. The most common items people forget are travel adaptors (13%), phone chargers (9%) and sun cream (6%).

Saga understands it can be easy to forget some holiday essentials, especially when people are excited about going away so it has recently launched a trip planner website to help the over 50s prepare for their holiday. Customers can visit the website and use ready-made packing lists so they don’t forget things like their sun cream or adaptors and buy their travel insurance and airport parking. The over 50s can also input their travel details and check the status of their flight, baggage allowance and what the weather will be like so they know what clothes to pack.

Roger Ramsden, Chief Executive, Saga Services, commented: “Everyone looks forward to their holiday but there are lots of things you need to take care of before you go away such as buying your travel insurance and booking your airport parking. We know that our customers like to be prepared and are savvy with their money so we have launched our new trip planner site to help them plan their holiday, as well as save money on things like car hire and airport hotels.”

October 25th, 2016 | Andrew Hagger | News

 The average UK property takes 91 days to sell, according to the latest City Rate of Sale report from Post Office Money Mortgages.

The report, which examines the average time a property takes to sell in 20 major cities across the UK, found that sellers in Bristol and Edinburgh had the least amount of time to wait, with homes spending 51 and 53 days on the market, respectively.

Cities to the West of the UK were most likely to see a long wait with residences in Swansea and Liverpool taking the longest to be sold –  a typical property taking over 100 days (100 and 108 respectively) to sell in both of the cities.

John Willcock, Head of Mortgages at Post Office Money, said: “House prices continue to rise across the country but eager sellers should remember that this might not be any guarantee of a successful sale. The attractive asking prices can lead many people to put their property on the market, leading to competition in the local market. Even property hot spots such as London are not necessarily guaranteed to sell quickly.”

Edinburgh has seen the biggest fall in the typical time properties have spent on the market over the past year – with the average home taking 25 per cent less time to sell compared to last year.

In contrast, the housing markets in Brighton and London, some of the best performing areas since the financial crisis, have seen the sharpest increase in the typical time that properties have spent on the market with Brighton seeing a 24 per cent increase and London, a 20 per cent increase. In part these movements in time on the market reflect changes in the number of properties listed for sale in the cities. For instance, time on the market in Bristol has risen over the past year (by 17.5 per cent) as strong house price growth has begun to attract more properties for sale – despite the fact it is still the quickest selling city in the UK.

With the exception of Swansea, where prices have remained steady, house prices have risen in each of the cities analysed in this report over the last year. The average price of a home in the UK rose by 8.7% in the year to June 2016. However, despite these rising prices, there are indications that the housing market pressure softened recently, with falls in both demand and supply.